Company & Director
Salary or pension? See what the same money is really worth.
Every €1 of salary costs an employer €1 plus 11.25% employer PRSI (11.4% from 1 October 2026) — and a higher-rate taxpayer keeps roughly half of it after tax. The same €1 paid into a pension carries no employer PRSI and is invested in full, subject to charges. Model it for your business below.
Model it
The salary-vs-pension modeller
Start simple. Open the detail when you want the full breakdown.
Salary in this package: €47,000
The package is agreed at the point of employment: part salary, part employer pension contribution — compared with paying the whole package as salary.
Warning: Salary sacrifice does not work for pensions. An existing employee cannot give up salary in exchange for an employer pension contribution — Revenue taxes the salary given up as the employee's own income (section 118B TCA; Revenue Pensions Manual, chapter 3). This comparison applies only to a package agreed at the point of employment or in a genuinely new contract. The employee may also make their own personal pension contribution on top, subject to Revenue's age-related limits.
For a package of €50,000, with €3,000 as an employer pension contribution: the employer saves €342 PRSI; the employee gets €1,421 more value than if the whole package were paid as salary.
€55,358
total employer cost (€55,700 if the whole package were paid as salary)
€342
employer PRSI saved per year
€38,013
employee net take-home (€39,592 if the whole package were paid as salary)
€3,000
gross into pension — invested in full, subject to charges
Illustration only — current 2026 rates — not advice or a quote
This shows the shape of the numbers, not a recommendation. Whether any of this suits your business — and how much — depends on your accounts, your people and your existing arrangements, and is only ever recommended after a full review. The value of investments can fall as well as rise, and past performance is not a reliable guide to the future.
Rates as at June 2026.
Show me the detail ▾
| Per employee, per year | Whole package as salary | Salary plus pension contribution |
|---|---|---|
| The package | ||
| Total package (salary plus pension) | €50,000 | €50,000 |
| Gross salary | €50,000 | €47,000 |
| Employer pension contribution | €0 | €3,000 |
| Cost to the employer | ||
| Employer PRSI | €5,700 | €5,358 |
| Total employer cost | €55,700 | €55,358 |
| For the employee | ||
| Employee income tax | €7,200 | €6,000 |
| Employee USC | €1,033 | €943 |
| Employee PRSI | €2,175 | €2,045 |
| Net take-home | €39,592 | €38,013 |
| Into pension | €0 | €3,000 |
Team scale
Headcount at each package level × the employer pension contribution per person.
| Staff | Package (€) | Employer pension contribution per person (€/yr) | PRSI saved/yr |
|---|---|---|---|
| €1,995 | |||
| €1,568 | |||
| €912 |
€4,475
employer PRSI saved per year across 17 staff
€44,745
over 10 years at today's rates (no pay growth assumed)
Assumes a single person's tax position (standard-rate band €44,000; single, employee or earned-income credits), 52 equal pay weeks, and PRSI at the rate in force today. The USC exemption and the low-pay PRSI credit are not modelled. Employer pension contributions to a PRSA are not a benefit-in-kind up to the employee's earnings for the year.
Rates: LIA June 2026 factsheet.
The challenge: salary costs more than it gives
When you set the pay for a new role, the business pays employer PRSI on top of salary — 11.25% at most salary levels (11.4% from 1 October 2026). Then the employee loses a large share of that salary to income tax, USC and PRSI. For a higher-rate taxpayer, around half of every euro never reaches them.
An employer pension contribution works differently. It carries no employer PRSI, it isn't taxed as income when it's paid in, and it's invested in full in the employee's name, subject to charges. For the same total package, the value that reaches your people can be considerably higher.
It is a recognised way to reward and keep good staff — and, for company directors, one of the most tax-efficient ways to take value out of the business.
PRSA or Master Trust?
Two common ways to provide employer pension contributions. The right one depends on your size, budget and goals.
| PRSA | Master Trust | |
|---|---|---|
| What it is | An individual pension contract for each employee, owned by them. | A group occupational pension scheme, run by a professional trustee board, that your company joins. |
| Set-up | Quick and simple; no scheme of your own to run. | More set-up; the master trust carries the governance duties. |
| Employer contributions | Not a benefit-in-kind, up to the employee's earnings for the year. | Not a benefit-in-kind; higher funding for directors is possible within occupational limits. |
| Suits | Smaller teams, and adding contributions quickly. | Growing teams, and directors wanting maximum funding room. |
| If someone leaves | The PRSA stays with them. | Their benefits can be transferred or preserved under the scheme rules. |
How to put it in place
01
Review
We look at your payroll, your budget and what you want the benefit to achieve — for staff, for directors, or both.
02
Choose the structure
PRSA, Master Trust or a mix — matched to your size, your directors' plans and how much flexibility you need.
03
Set it up and explain it
We set up the arrangement, connect it to payroll and help you explain the benefit so your people value it.
04
Review it every year
Limits, rates and your business change. We review the arrangement annually so it keeps doing its job.
Investment Warnings
Warning: The value of your investment may go down as well as up.
Warning: If you invest in this product you may lose some or all of the money you invest.
Warning: If you invest in this product, you may not have access to your money until you retire in accordance with the requirements of the Scheme Rules.
Warning: This product may be affected by changes in currency exchange rates.
Warning: Past performance is not a reliable guide to future performance.
Talk it through — no obligation
Your modelled figures travel with the request, so the first conversation starts from your numbers.
There's no separate fee for life, pensions, investment or protection advice.